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There’s a parade of “MISSION ACCOMPLISHED“  pronoucements about the recession being “over,” which – in case you missed it – includes the Bank of Canada’s very own Goldmach Sachs’ alumni: Mark Carney.  Only if he had made the annoucement on the deck of an aircraft carrier, could it be more farcical.

James Howard Kunstler’s snarky response to the string of  “the recession is over” pronoucements made me laugh:

All this goes to show is how completely the people in charge of things in the USA have lost their minds.  They seem to think this mass exercise in pretend will resurrect the great march to the WalMarts, to the new car showrooms, and the cul-de-sac model houses, reignite another round of furious sprawl-building, salad-shooter importing [AM: I LOL'ed ], and no-doc liar-lending, not to mention the pawning off of innovative, securitized stinking-carp debt paper onto credulous pension funds in foreign lands where due diligence has never been heard of, renew the leveraged buying-out of zippy-looking businesses by smoothies who have no idea how to run them (and no real intention of doing it, anyway), resuscitate the construction of additional strip malls, new office park “capacity” and Big Box “power centers,” restart the trade in granite countertops and home theaters, and pack the turnstiles of Walt Disney world – all this while turning Afghanistan into a neighborhood that Beaver Cleaver would be proud to call home.

Link via @newres

This week I noticed an opportunity to perform a little experiment on the traffic generated by relevant links in the comments of Paul Krugman’s Friday column in the New York Times.

The article in question was “The  Joy of Sachs,” a critique of the record quarterly profits posted last week by Goldman Sachs, even while the continuing, endless economic decline surrounds them on all sides. Goldman Sachs is  a Wall Street giant whose successful senior executives regularly pass through the revolving door into the US Treasury Department. Yep, the foxes are running the hen house.

Or as Krugman puts it:

Goldman is very good at what it does. Unfortunately, what it does is bad for America.

I’ve been watching Goldman Sachs closely lately. I want to know how these guys are gaming the system to come out on top no matter what market they operate in.  So moments after the article was posted at 10:00 MT on Thursday night (12:00 AM ET or Friday morning in New York) I posted this comment inviting other readers to look at two other relevant pieces I recently shared on twitter providing some background on Goldman Sachs.

For more in depth analysis of Goldman Sachs’ slimy business practices I recommend:

1. Matt Taibbi’s “Vampire Squid” take on Goldman Sachs in the latest Rolling Stone: http://bit.ly/hwCbZ

2. CBC’s 30 minute interview with Pulitzer-Prize-winning investigative reporter David Cay Johnston on Goldman Sachs & Gov’t. Here’s the MP3: http://bit.ly/ZzLFm

It was the first comment posted on the op-ed. Four days and 279 NYT “recommends” later my comment was the 13th most recommended comment and on the first page. Admittedly, both the Taibbi and Johnston pieces are excellent, but I am still surprised by the results of the web traffic experiment.

I used the bit.ly URL shortener for each link. With 40 clicks on the Taibbi piece and 52 clicks on the David Cay Johnston interview to start with, I was impressed to see a huge spike in traffic.

With gems like this delicious line – “the world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”  – my link to Matt Taibbi’s Goldman Sachs piece received 1324 clicks on Friday and 271 and 74 clicks on Saturday and Sunday respectively.

My direct link to CBC’s The Current Podcast episode with  David Cay Johnston, a hidden gem from Canada’s public broadcaster received tons of traffic too, even after I described it as a “30 minute interview.”  After 768 clicks on Friday the podcast received 199 and 205 on Saturday and Sunday.

Four days later my quick comment with two relevant backgrounder pieces have generated over 3,000 clicks between to the two shortened URLs.

There’s a lesson here. Curating, saving and sharing relevant, valuable links in the comments of very popular websites can generate impressive traffic.  Traffic that leads away from the New York Times’ website. This is a big change.

It’s like I encouraged readers to put  down the newspaper to read a magazine and listen to the radio.  But the Times‘ does benefit from my traffic draining, eyeball diverting links. Creating a community that encourages users to link to background information maintains their reputation as the place to get information; the “paper” of record, even if there are no dead trees involved.

In the end, I’m just happy to do what I can to expose Goldman’s business practices and help the Times readers call “bullshit” on the Wall Street orthodoxy that deserves at least part of the blame for the near-total economic meltdown.

Today we learned that CTV will broadcast 60 hours of tomorrow’s Michael Jackson memorial over 10 of its channels.  While reading their press release loudly proclaiming the “super-simulcast,” I cringed with horror. Has anyone turned on a TV in the last week, flipped through the channels, and not had Michael Jackson’s ridiculously tragic life invade their living room?

It gets better.

After a long and nauseating “Save Local TV” campaign by CTV and CanWest (and the even more disgusting counter campaign by the cable and satellite companies – I’m looking at you Shaw and Rogers) today the CRTC decided to bailout the broadcasters to the tune of $100 million for the 2009-10 broadcast year.

Saying the absolutely most ridiculous thing possible, CRTC Chair Konrad von Finckenstein, Q.C. pronounced that “we have taken steps to ensure that broadcasters … continue to provide Canadians with programming that reflects their needs and interests.”

von Finckenstein will surely soon declare that up is down,  black is white and that money grows on trees. The CRTC is requesting that you submit your comments by August 10, 2009, by filling out the online form.

On the bright side, Ben Mulroney and dead Michael Jackson have real chemistry together.  (as noted by  @robertmcbean)

From The Progressive Economics Forum:

This morning’s Consumer Price Index data reveals that the national inflation rate fell to 0.1% in May. Four provinces – Alberta, New Brunswick, Nova Scotia, and Prince Edward Island – posted negative inflation rates.

The supposed risk of continuing fiscal and monetary stimulus too long is that they could propel accelerating inflation. The Finance Minister and Bank of Canada Governor have recently begun proposing an “exit strategy” from stimulative policies. This weekend’s statement from G-8 Finance Ministers also called for “exit strategies.”

Today’s inflation numbers confirm that this talk is wildly premature, particularly as far as Canada is concerned. Our inflation rate will almost certainly turn negative before beginning to increase. Governments and the Bank of Canada have ample time to press ahead with stimulus policies before rising inflation becomes a meaningful concern.

John Holbon’s “Either/Or”  is a sensible short analysis of the heart of the financial crisis and presents the case for giving the Geithner plan time to work,(or fail) excerpted from Crooked Timber:

Suppose Obama came out and said, roughly:

My fellow Americans, the thing about the Geithner plan is this. Experts disagree about the nature of the crisis. Either it is a liquidity problem or an insolvency problem. That means: either the market values of these so-called toxic assets are depressed because of a kind of market failure; or the market has priced these assets more or less correctly and many institutions holding these assets are, as a result, insolvent. If we are indeed in a liquidity crisis, the Geithner plan should solve it as well as any alternative plan could. If it is an insolvency crisis, however, as many experts believe, the Geithner plan will do nothing – or not nearly enough.

If the Geithner plan fails, we will confront another either/or: either nationalize these too-big-to-fail institutions, at great cost, or allow them to fail, collapsing the global financial system and, very likely, the world economy. This is no true choice, however. Hard as nationalization will be, if it comes to that, the alternative would be far, far worse.

We do not need to take this daunting step of nationalization yet because, first, we’re trying the Geithner plan. What you should know about the Geithner plan is that, if it fails, it will still have been worth trying. We will have determined that the problem is indeed insolvency. We will have clarified the path to be taken, laid to rest any reasonable skepticism about the strict need for nationalization. And we will have paid no more for this knowledge than we would have had to pay in any case. If the government effectively transfers money to distressed financial institutions, under the Geithner plan, and later those institutions have to be nationalized for a time, there is no need to ‘pay twice’.

[Read the rest at crookedtimber.org]

This is the first piece of analysis that has actually put me at ease in a long time. In summary, experts disagree about the nature of the problem, Geithner’s plan may “work” or may fail. If it does fail, the case for nationalizing the US banks is clear; the money spent bailing them out will be effectively back in the hands of government until they can get the financial system back on a solid foundation and re-privatize. To be clear, I still share Krugman’s concerns about the potential of a luke warm, quasi-success / semi-failure of the plan where the global economy sputters along flatlining and not growing (I also share Krugman’s concerns about the moral hazard inherent in the government handing over huge subsidies to investors). If this third outcome results, the biggest fight of Obama’s first term will likely be the political battle about the necessity of temporary nationalization of the banks.  

Let’s hope it works the first time. Because if the Geithner plan does fail (or even semi-fail), Obama will have lost lots of one of his most precious resources in the midst of this crisis: time.

The Huffington Post’s Paul Dailing casts a hilarious critical gaze on the “Death of Newspapers” meme that pervades twitter and the “blogosphere” in How to Become a “Death of Newspapers” Blogger

The Toronto Star surveys the lay of the land in Canadian broadcasting after huge cuts to the CBC this week and the potential of more cuts at the private broadcasters in TV tumult on the Canadian dial

NPR and WNYC’s “On the Media” looks at the JP Neufeld, a Concordia University student in Montreal who stopped a an act of school violence before it happened, 3000 miles away in the UK: The Long Arm of the Law

The Atlantic’s The Quiet Coup is a devastating examination of the role and influence of the finance and banking sectors over the entire American political process. 

Ian Brodie, Harper’s former chief of staff , asserts that evidence doesn’t matter when making public policy via Macleans.ca

The Totalitarian Temptation and all that is an examination of the tendency towards totalitarian belief systems on both the left and right. I loved it, but I care about this sort of stuff. Link to  http://crookedtimber.org/ via @MikeSoron

I just read Krugman’s lament. The Obama Administration, and specifically Treasury Secretary Tim Geithner have, at long last, put forward a plan. But it’s a terrible plan that doesn’t address the fundamental rot at the heart of the global economic crisis. Or as Krugman put it, “The zombie ideas have won.”

From the Times article Krugman references, it is clear that his frustration is justified, in that the US Treasury Dept. just handed over a trillion dollar blank cheque to the zombie banks. Furthermore, even with another trillion dollars thrown into this bottomless pit, the people saddled with the responsibility of fixing the banking sector (and, more importantly, the credit markets) are still underestimating the scope of the crisis and are longing for the good old days of inflating bubbles.  

The proposal’s fundamental assertion is that the nuclear waste from the securitized sub-prime morgage market is being undervalued and that the best way to fix this problem is for the US government hand private investors “generous subsidies, in the form of low-interest loans, to coax investors to form partnerships with the government to buy toxic assets from banks.”  The moral hazard inherent in this proposal is lost on Tim Geithner. As Krugman put it: “this is an open invitation to play heads I win, tails the taxpayers lose.”

The biggest problem is that these zombie banks are dead. They are under-water in a sea of red ink, but some of them have reached the magical level of systemic risk that’s made them “too big to fail.” And in reaching this disgusting size, the zombies managed to completely envelop the entire American political system in their grip. 

As political unpopular as it may to seem, the only sensible proposal is temporarily nationalizing the banks (and de facto banks, like A.I.G.), while freezing all foreclosures.  This is the only way to amputate the zombie appendages currently strangling the global economy.